(Reuters) - Indian shares closed higher on the back of IT and financial stocks on Tuesday, recovering from sharp early losses triggered by the abrupt exit of the central bank governor and ahead of key state election results.
Reserve Bank of India Governor Urjit Patel resigned abruptly on Monday after a months-long tussle over policy with the government that has raised concerns about the bank's independence as a national election nears.
Meanwhile, the Bhartiya Janata Party (BJP) could lose power in three key states, four TV networks said, citing votecount leads, potentially handing Prime Minister Narendra Modi his biggest defeat since he took office in 2014, and months ahead of a general election.
The stock market regained composure towards the end of the session, with the Nifty closing 0.58 percent higher at 10,549.15, while the benchmark Sensex ended 0.54 percent firmer at 35,150.01.
Private sector lender Yes Bank Ltd, which ended 7.4 percent firmer, was the best performer in percentage terms, while State Bank of India closed 2.6 percent higher.
Tata Consultancy Services Ltd closed up 1.2 percent, while shares in Sun Pharmaceutical Industries Ltd rebounded from a Feb. 2013 low to end 5.8 percent higher.
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(Reporting by Chris Thomas in Bengaluru, Editing by Sherry Jacob-Phillips)